National Association of Investors Corp. (NAIC)

National Association of Investors Corp. (NAIC)

What is the National Association of Investors Corp.?

The National Association of Investors Corp. is a non-profit organization dedicated to investment training. The association is based in Madison Heights, Michigan, and is made up of investment clubs as well as individual investors from the United States.

Understanding the National Association of Investors Corp. (NAIC)

The National Association of Investors Corp. (NAIC), also known as BetterInvesting, is a Michigan-based 501 (c) (3) non-profit organization whose goal is to teach individuals how to become successful long-term investors. The NAIC is an umbrella organization which had approximately 4,000 member investment clubs and approximately 40,000 individual members at the end of 2020. The original name of the NAIC was the National Association of Investment Clubs.

The magazine for members of the National Association of Investors Corp. is called BetterInvesting, and it became the association’s brand name in 2004. The organization was founded in 1951 when five investment clubs formed the national association. Its mission is to educate individuals about the benefits of a long-term investment in common stocks. With the popularity of 401 (k) s and other defined contribution pension plans, education regarding stock and bond mutual funds has been added.

Depending on their membership level, members have access to online tools to determine if a stock is that of a quality growth company and is selling at a price that will provide sufficient potential return. Members also receive educational webinars, studies on First Cut actions provided by the BetterInvesting community, digital and print editions of BetterInvesting Magazine, support for locals and other products and services.

National Association of Investors Corp. Investment Principles

The National Association of Investors Corp. highlights four principles for successful long-term investment:

  • Invest regularly, regardless of market conditions;
  • Reinvest all earnings;
  • Invest in growing companies (and growing mutual funds); and
  • Diversify to reduce risks.

The heart of the National Association of Investors Corp. The investment approach to investing is the third principle: investing in growing companies. The primary tool for valuing common stocks is a two-page form with a semi-log graphic on the front called the Stock Selection Guide (SSG). The SSG dates from the founding of the organization and was created by George A. Nicholson. SSG displays a company’s 10-year sales and earnings per share, pre-tax profit margins and return on equity; high and low annual price / earnings ratios over five years; and other important information to answer two questions: is this a well-run business? Is the stock selling at a reasonable price? The last principle was added and emphasized in the 80s and 90s.

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